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Nina.39
Starting Member
10 Posts |
 Posted - 28 March 2012 : 21:58:44
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| My husband had a car on lease in 2005, paid £220 per month - 18 months ago had to sell it to pay a tax bill but have kept up the payments every month since. What would happen if he went bankrupt? |
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mydebtpages
Starting Member
43 Posts |
Posted - 28 March 2012 : 23:04:12
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Hi Nina,
Something not quite adding up here - if your husband had a car on lease it belongs to the lease company and it wouldn't have been his to sell unless he bought them out, in which case he presumably wouldn't still be making payments.
Can you clarify what happened ?
Regards
- My DebtPages |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 28 March 2012 : 23:21:41
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I would have thought this would have shown up on an HPI search? The car would belong to the lease company and he should not have been able to sell it. Was it a private sale? If so then he may well have been able to get away with it.
There could be problems though with whoever he sold it to.
Follow through
Make your dreams come true
Don't give up the fight
You will be alright
'Cause there's no one like you in the universe
Jan
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Nina.39
Starting Member
10 Posts |
Posted - 29 March 2012 : 06:04:25
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Hi - I think he just kept extending it when the finance company got in touch and a new agreement was set up. It was one of those that had a balloon which you could pay off if you wanted to, but over the past 3 years or so things have just got worse for us and we seem to be drowning in debt and bankruptcy seems to be our only option. I am just worried about the implications for him when this comes to light! I mean he has kept the payments up every month!
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 29 March 2012 : 08:40:05
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I've no idea on this one I'm afraid - speak to one of the experts who post on here, their details are under the experts link on the left hand side of the page.
The advice is free and they will be able to help you.
Follow through
Make your dreams come true
Don't give up the fight
You will be alright
'Cause there's no one like you in the universe
Jan
xxx |
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Melanie.n
forum expert
United Kingdom
1282 Posts |
Posted - 29 March 2012 : 09:03:20
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Hi there
technically, he did not hold 'title' to the vehicle as previously stated and the vehcile should not have been sold. There is a risk (and I have had a client that this has happened to) where the company has taken back possession of the car from the purchaser, leaving my client owing the purchaser the money he paid for the car - this was not a nice scenario as he had sold the vehicle to a neighbour!
But at the end of the day, your husband has a debt which he owes to the lease company, which if he filed for bankruptcy, would be included as one of his creditors. If the lease company chases up the new owner of the vehicle and takes possession, the unfortunate purchaser of the vehicle, who now, no longer has the car, would also become a creditor in the bankruptcy.
Vital lesson for anyone buying a car via a private sale - carry out a HPi check! or it could come back to bite you on the bum!, Melanie
Melanie Nicholas CertDR
30+years insolvency experience - 23 of which in the Insolvency Service and the past 8 years with a number of IP firms. I can be contacted at www.lifestylemoney.net or via the experts tab |
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mydebtpages
Starting Member
43 Posts |
Posted - 29 March 2012 : 14:07:03
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Hi Nina
Assuming the situation is as you detail above then it sounds like your husband needs to get himself out of the finance agreement.
In the absence of the car this probably means handing over some money to the finance company. Once he is out of the agreement the fact he has already sold the car should cease to be an issue.
Depending on the nature of the agreement, he might just be able to wait for it to come to a natural end, assuming the finance company don't expect the car back or any money at the end of it.
If he is still in an agreement as the time of his bankruptcy and there is no car things could unravel very badly as described by Melanie above.
Regards
- MyDebtPages |
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Nina.39
Starting Member
10 Posts |
Posted - 29 March 2012 : 14:36:51
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Would he get into trouble with the official receiver if he pays off the lease because we were told that when he filled out statement of affairs it would be questioned about favouring creditors!
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 29 March 2012 : 17:04:23
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I think he would be in trouble if he favoured one creditor over another and the transaction could be reversed.
Follow through
Make your dreams come true
Don't give up the fight
You will be alright
'Cause there's no one like you in the universe
Jan
xxx |
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mydebtpages
Starting Member
43 Posts |
Posted - 29 March 2012 : 18:07:58
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Yes, it's certainly something that should be considered but I'm not sure that making a payment to break a contract would count as preferential repayment of debt - arguably there is no debt as the payments are up to date.
I think the short answer is your husband may struggle to find a completely clean way out of this in the sense it may be a case of picking the lesser of evils - i.e the risk of upsetting the O.R. as against the risk of the finance company trying to repossess the car from whoever's bought it.
Regards
- MyDebtPages |
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Niobe
Administrator
United Kingdom
4590 Posts |
Posted - 29 March 2012 : 19:13:03
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The lease payments would have to be included in bankrutpcy though surely? If that is the case then I don't think the company would be very impressed that there is no car to repossess and I would feel very sorry for whoever bought it in good faith that they stand to lose their car.
Follow through
Make your dreams come true
Don't give up the fight
You will be alright
'Cause there's no one like you in the universe
Jan
xxx |
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mydebtpages
Starting Member
43 Posts |
Posted - 29 March 2012 : 23:17:43
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Absolutely. I can't see any circumstances where a car lease would be viewed as a legitimate expense where there is no car, but I don't know whether the O.R. would have the power to actually force termination of the agreement.
In any event the agreement may contain bankruptcy clauses which would allow automatic repossession in the event of bankruptcy. Whether the lease company would actually use them is another matter.
A possible option might be for a third party to either take over the payments or buy out the lease.
Regards
- MyDebtPages |
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Nina.39
Starting Member
10 Posts |
Posted - 31 March 2012 : 14:38:12
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Does anyone know what happens to the mortgage when someone goes bankrupt in that does the OR take charge and it becomes one of the assets ie; the mortgage company loses control and it is down to the OR to decide whether to sale or not? While we continue to pay the mortgage can we stay there until told otherwise by the OR - also what about the secured loans do we continue to pay them as well or do they lose there power to force sale when someone goes bankrupt?
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debtinfo
forum expert
2826 Posts |
Posted - 31 March 2012 : 14:44:43
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| The chargeholders retain there rights during and after bankruptcy, so if you dont pay them then they couls repossess the property |
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Viki.W
forum expert
United Kingdom
2211 Posts |
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Topic |
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What happens if my husband goes bankrupt after selling leased car ?
